National health insurance – beware the externalities

15 Apr
2005

Dangerous Delusions Corrode our Medical Services

Please read this article. I will give a few quotes – but the entire article is worth a clickity-click.

Our national flirtation with the illusory benefits of “free” national health insurance corrodes our debate about improving the quality of health care in the United States.

Partly because of the allure of this delusion of free or single-payer national health insurance, we are slowly ceding our medical service system to government mismanagement at patient and taxpayer expense.

The most dangerous delusion of all is that government-paid universal medical services are compassionate because they are supposedly “free” for everyone. This egalitarian theme sounds benevolent in theory, but is callous in practice.

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The first myth is well expressed in this quote from the U.S. Physicians’ Working Group for Single-Payer National Health Insurance: “Access to comprehensive health care is a human right. It is the responsibility of society, through its government, to ensure this right.”

The authors point out that the so-called basic human right to health care in countries with national health insurance is “nothing more than the opportunity to get services for free (or at very little cost) as the government decides to make those services available. But government is under no obligation to provide any particular service.”

Government controls costs by imposing global budgets on hospitals and health authorities and limiting supply. As a result, demand exceeds supply for virtually every service and patients are forced to wait months and even years for treatment.

They are sometimes apologetic, however. An electrocardiogram appointment letter from the Moncton Hospital to a New Brunswick, Canada,heart patient said the examination would be in three months. It added: “If the person named on this computer-generated letter is deceased, please accept our sincere apologies.”

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Aneurin Bevan, father of the National Health Service (NHS) established in Britain in 1948, articulated the second myth — equal access to health care for all people. He declared, “the essence of a satisfactory health service is that rich and poor are treated alike, that poverty is not a disability and wealth is not advantaged.”

In spite of this high-minded goal, studies in both Britain and Canada indicate that their socialized systems are far from fulfilling this goal. In an article on the problems of unequal access in Britain, Patrick Butler observed: “Generally speaking, the poorer you are and the more socially deprived your area, the worse your care and access is likely to be.”

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The third myth is related to the above two: that care should be based on medical need rather than ability to pay. But people in countries with a socialized system are increasingly willing to pay outside the system for better and faster treatment. “Free” surgery isn’t worth much if you have to wait until you’re near death to receive it.

Somewhere lurking in all these myths is the delusion that cost is the only limiting factor in obtaining health care. If government provides the medical services to everyone for “free”, then, as the British Medical Journal predicted so hopefully in 1942, a national health system will provide “a 100 percent service for 100 percent of the population.” After sixty years of trying, they haven’t even come close.

Rationing, inefficiencies, and lack of quality are the real fruits of this socialist experiment. And we need less, not more of it.

On the other hand, when patients decide and speak with their own resources, including private insurance and cash, hospitals and doctors pay attention to them — and meet their needs.

Our current health system has many problems, but we must carefully consider the unexpected consequences of any change. As my son reminded me last night – we must consider the externalities of any law.

In economics, the effects that the acts of consumers or producers have on each other. Externalities range from pollution and technological (see technology) inventions to the change in the range of options available to consumers and are differentiated from internalities because current knowledge prevents the former from being included into the formal equations of an analysis. Externalities may also be regarded as the unanticipated side effects of calculated courses of action.

As we think about any change in our health care system beware the externalities!

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Related posts:

  1. Why not make health insurance competitive?
  2. Comparative effectiveness research – more thoughts
  3. Some early inclusions in the House bill
  4. Thoughts on health care costs
  5. The health care summit – 10 ideas

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5 Responses to National health insurance – beware the externalities

Avatar

arf

April 17th, 2005 at 3:42 pm

For a good read regarding the realities of the single-payer systems worldwide:

Lives at Risk: Single-Payer National Health Insurance Around the World (Paperback)
by John C. Goodman, Gerald L. Musgrave, Devon M. Herrick
Publisher: Rowman & Littlefield Publishers (July 1, 2004)
ISBN: 0742541525

I would highly recommend this book. It is especially worthwhile for the “debunking” of many of the arguments made by the single-payer advocates, with references. There is also a humble proposal of a healthcare system that might work and would be acceptable to most Americans.

An earlier version of the work can be found here for free:

http://www.debate-central.org/topics/2002/book2.pdf

I believe it was written about 2002, so it is a little outdated.

Avatar

Jesse of Maryland

December 2nd, 2006 at 7:06 pm

Greetings,

Single Payer healthcare or a National System is most needed in our beautiful country, the USA. I meet many good, honest, and hard working Americans that do not get Health Insurance through their employers, and are not eligeable to get health insurance on their own, either because they have a pre-existing condition, which private health insurance companies will not insure, or these people just flat out cant afford the high premiums and high deductibles of todays current health insurance costs. I respect your opinions on your site, but when I think about all these good Americans that cant get health insurance, I completely disagree with you. We need some kind of fix to our expensive Health Insurance system, and many doctors and other health care professionals agree. Health Insurance companies, and especially pharmaceutical companies are a main cause of the inflated prices. Health insurance premiums are ever increasing and go up more than inflation every year. Private insurance companies are allowed to cherry pick who they accept onto their plans, because of underwriting.

I am aware that most states have high risk pools for those people that have been turned down by private insurers, or with people that have pre-existing conditions. The montly costs for these high risk pool plans are astronomical and most Americans cant afford the super high premium costs. These are just some of the many credible, hard outlying facts of why we need a true national healthcare system.

Many good Americans need equal and affordable, access to healthcare. I stress the word affordable.

Thank you for your time, my fellow American. I ask you and anyone who reads this to have a caring heart towards the many millions of Americans who are uninsured for various good reasons, or who are underinsured. Our healthcare and health insurance system must be fixed and it will be in the future.

God Bless.
Jesse S.

I recommend all readers to read and check out http://www.healthcare-now.com They are an organization that is pushing and lobbying congress to pass a true Nationwide Healthcare system, and the taxes on each American for it are very low. Judge for yourself whether or not a true national healthcare system is good after reading this site.

Avatar

Marilin Engelman

February 28th, 2007 at 10:34 am

Hi,
I would like to get on your e-mail list. As a co-convenor of the Suffolk County Gray Panthers on Long Island, your information would be so important for us to have,

Avatar

Erick

November 30th, 2007 at 1:59 pm

Nothing is free, of course.

The argument over which system is “best” is a complicated one. How do you measure this? Are you talking about the “typical” care someone would expect to receive in either system? If this idea of “best” was clearly definable, then there would be no argument!

Take me, for instance. I basically have no preventative health care in the US right now. I work full time, but the company I work for is a small one. They don’t pay me much either. I took out a high deductible insurance policy, even tough I have a math degree and understand statistics. It was about all I could afford on my salary. I don’t go to the doctor, even if sick. I recently had a concussion and I hurt my shoulder. I just stayed in bed.

So, in effect I have no preventative care in the US. Clearly, for me, I would have “better” preventative care in the UK or Canada.

Assume we cede the dispute over which is “better”, and assume the insurance mediated free market system is “best”. The next question is more a sociological/moral one. How important is the idea of “equality of distribution” as applied to health care? What if, on “average” (however that is measured), we all had to accept WORSE care, but… everyone got that care. In other words, does the question about health care involve more than an “economic” answer?

After all, there is a very good analogy here… education. If education were left to the free market, there no doubt would spring up some really excellent schools out there. Rich people would send their kids there. Other, cheaper schools, with inferior teachers and resources would sprout up for those less fortunate. The really poor simply wouldn’t send their kids to school at all. They wouldn’t be able to afford it.

Collectively, we as a society recognized there were other considerations than the free market, quality of goods, and economic efficiency. In this case we recognized the importance of “opportunity” and an “equality of distribution”. Some people call this “positive liberty”, as contrasted with “negative liberty”.

I’m certainly not a socialist or an advocate of communism. There exist no ideologically “pure” economies in the world today. All economies are effectively “mixed” economies to one degree or another. Any economics major can tell you all about trade offs. Well, the question we have to answer as a society is… is making health care available to all worth the trade off? Because, of course, nothing is ever free.

Avatar

Erick

November 30th, 2007 at 4:24 pm

Just as an aside here…

Liberals would be greatly aided if they recognized this one general thing about conservatives. Virtually every argument by conservatives, libertarians, and free market advocates relies on these 2 assumptions:

1) Economic well-being is the most important thing in life.
2) A bigger economic pie is always better than a smaller pie, regardless of how it is divided.

If you agree with those 2 things, stop arguing and join them! They will always be right… and they are right, coincidentally. It all comes down to a simply mathematical maximization problem.

If you don’t agree with those 2 things, then just be aware that those are their 2 assumptions, whether they state them or not. What I find interesting is how they manage to argue and argue, so eloquently, and prove their point, time and time again, without ever getting anyone to question their 2 basic assumptions! Half the time they manage to win arguments without ever even stating their assumptions! It’s quite a trick.

So, if things like “way of life”, “cultural traditions”, or solidarity mean anything to you, then you should seriously question assumption #1.

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